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Helping Low-Income Consumers Save Can Mean High Profits For Smart Banks: Individual development accounts could be a boon to banks, but a patchwork of local groups does not have the reach to make it a nationwide effort. That may change in 2007, thanks to a shift in the tax law.

Publication: US Banker
Publication Date: 01-JUL-06 		Format: Online
Delivery: Immediate Online Access

Article Excerpt
In the decade-plus that individual development accounts have been around, they have shown that low-income earners can save and build assets if they are educated and are given the right options, according to advocates. Nevertheless, IDAs have made little headway on the national stage.

There is no central clearinghouse for industry numbers, which is part of the challenge for real traction, but estimates from observers peg the number of IDAs nationwide at about 20,000. Average account size hovers between $2,000 and $3,000 each. The goal? To get low-income households on the path to regular saving.

Similar to 401(k) plans in offering a matching contribution from the sponsoring program,...

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